SPTL - 10-Year U.S. Treasury Yield 'Fair Value' Estimate: June 18 2024

2024-06-18 12:59:00 ET

Summary

• The US 10-year Treasury yield continues to defy The Capital Spectator’s ‘fair-value’ estimate by trading at a premium, but the relatively wide gap still appears to be a constraint to the upside for this key market rate.
• Earlier this year, the market premium for the 10-year yield increased to an unusually high but not unprecedented level.
• Short of a relatively dramatic run of reflation in the US economy and/or a strong acceleration in economic growth relative to recent history (neither of which looks likely at this point), the path ahead seems to favor a lower spread.

The US 10-year Treasury yield ( US10Y ) continues to defy The Capital Spectator's 'fair-value' estimate by trading at a premium to this model, but the relatively wide gap still appears to be a constraint to the upside for this key market rate....

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